Upside/Downside Ratio [UpDown]

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The Upside/Downside Ratio function determines the momentum of the market by calculating the ratio of the volumes of advancing to declining issues. Parameters ------------------ Advancing Volume   For issues (securities) that closed above their opening price, the total volume traded. Declining Volume     For issues (securities) that closed below their opening price, the total volume traded. Note that while this function is intended for use with these specific values, any values can be used for these parameters, including preprocessed values or values for a subset of the market. Indicator Value ------------------------ The Upside/Downside Ratio is calculated by dividing the advancing volume by the declining volume. This indicator is often smoothed with a moving average to filter out day-to-day fluctuations and display longer term trends. Usage ----------- The Upside/Downside Ratio is useful for determining the momentum of the market. Values over 1 are generated when more volume is associated with stocks that are advancing (increasing in price) than declining. Values less than 1 are generated when more volume is associated with stocks that are decreasing in price. This indicator makes a good overbought/oversold indicator for the market. Extremely high values may indicate that the market is becoming overbought, meaning that a sell-off may occur in the near future causing prices to drop. Likewise, extremely low values can indicate that the market is becoming oversold. Another characteristic to watch for is "mutliple 9-to-1 days". In other words, watch for two (or more) values of 9 or greater within a three month period. This pattern will typically indicate a strong bull market is beginning. In general, broad market indicators can be used for trading against broad market indices through options, futures, and mutual funds. They can also be used to increase the effectiveness of more specific signals by adding confirmation or warning of upcoming trends. Source ------------ This indicator is based on an entry in "Technical Analysis From A To Z" by Steven B. Achelis.